CPI trustee gets initial approval of $2.4 million employee settlement

By Kali Hays

New York, April 10 - CPI Corp.'s trustee, Charles A. Stanziale, obtained preliminary approval of a class action settlement agreement between the company and former employees alleging violations of the Worker Adjustment and Retraining Notification Act, according to an order filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the settlement requires all of the current claims of former employees involving severance pay, back pay and any other benefits to be released in exchange for a single claim of $779,144 for headquarters employees and another single claim in the amount of $1.63 million for all other filed employees.

The class action complaint was filed on May 3, 2013 accusing the company of failing to give a 60-day notice prior to ordering mass layoffs, a requirement under the WARN Act.

While the company denies any violation of the WARN Act, Stanziale claimed that the settlement is the best course of action as the legal proceedings would be "protracted and expensive to litigate, and the outcomes uncertain," according to the motion.

A hearing for final approval of the settlement is scheduled for Aug. 21.

CPI, a St. Louis-based portrait studio operator, filed for bankruptcy on May 1, 2013. Its Chapter 7 case number is 13-11158.

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